BILL NUMBER: SB 1883	CHAPTERED  09/12/00

	CHAPTER   419
	FILED WITH SECRETARY OF STATE   SEPTEMBER 12, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 11, 2000
	PASSED THE SENATE   AUGUST 7, 2000
	PASSED THE ASSEMBLY   JULY 6, 2000
	AMENDED IN ASSEMBLY   JUNE 12, 2000
	AMENDED IN SENATE   APRIL 11, 2000
	AMENDED IN SENATE   MARCH 27, 2000

INTRODUCED BY   Senator Sher

                        FEBRUARY 24, 2000

   An act to amend Section 98 of the Revenue and Taxation Code,
relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1883, Sher.  Property taxation:  revenue allocation:  TEA
formula.
   Existing property tax law requires the auditor of each county with
qualifying cities, as defined, to make certain property tax revenue
allocations to those cities in accordance with a specified Tax Equity
Allocation (TEA) formula and to make corresponding reductions in the
amount of property tax revenue that is allocated to the county.
Existing property tax law also requires that the amount of revenue
allocated to a qualifying city pursuant to the TEA formula be
reduced, as provided, by, among other things, the amount of tax
revenue that is no longer collected by a qualifying city in the first
fiscal year following that city's reduction in the rate or base of a
local tax that was first imposed prior to January 1, 1988.
   This bill would, for the County of Santa Clara only, instead
require that the amount of revenue allocated to a qualifying city
pursuant to the TEA formula be reduced, as provided, by the net of
(a) the amount of tax revenue that is no longer collected by a
qualifying city in the first fiscal year following that city's
reduction in the rate or base of a local tax that was first imposed
prior to January 1, 1988, and (b) the additional amount of tax
revenue that is collected by a qualifying city in the first fiscal
year following that city's increase in the rate or base of, or new
imposition of, a local tax on or after January 1, 1998.  By imposing
new duties in the annual allocation of ad valorem property tax
revenues, this bill would impose a state-mandated local program.
   This bill would make legislative findings and declarations as to
the necessity of a special statute.
   This bill would incorporate additional changes in Section 98 of
the Revenue and Taxation Code, proposed by SB 1581 to be operative
only if SB 1581 and this bill are both chaptered and become effective
on or before January 1, 2001, and this bill is chaptered last.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 98 of the Revenue and Taxation Code is amended
to read:
   98.  (a) In each county, other than the County of Ventura, having
within its boundaries a qualifying city, the computations made
pursuant to Section 96.1 or its predecessor section, for the 1989-90
fiscal year and each fiscal year thereafter, shall be modified as
follows:
   With respect to tax rate areas within the boundaries of a
qualifying city, there shall be excluded from the aggregate amount of
"property tax revenue allocated pursuant to this chapter to local
agencies, other than for a qualifying city, in the prior fiscal year,"
an amount equal to the sum of the amounts calculated pursuant to the
TEA formula.
   (b) (1) Except as otherwise provided in this section, each
qualifying city shall, for the 1989-90 fiscal year and each fiscal
year thereafter, be allocated by the auditor an amount determined
pursuant to the TEA formula.
   (2) For each qualifying city, the auditor shall, for the 1989-90
fiscal year and each fiscal year thereafter, allocate the amount
determined pursuant to the TEA formula to all tax rate areas within
that city in proportion to each tax rate area's share of the total
assessed value in the city for the applicable fiscal year, and the
amount so determined shall be subtracted from the county's
proportionate share of property tax revenue for that fiscal year
within those tax rate areas.
   (3) After making the allocations pursuant to paragraphs (1) and
(2), but before making the calculations pursuant to Section 96.5 or
its predecessor section, the auditor shall, for all tax rate areas in
the qualifying city, calculate the proportionate share of property
tax revenue allocated pursuant to this section and Section 96.1, or
their predecessor sections, in the 1989-90 fiscal year and each
fiscal year thereafter to each jurisdiction in the tax rate area.
   (4) In lieu of making the allocations of annual tax increment
pursuant to subdivision (e) of Section 96.5 or its predecessor
section, the auditor shall, for the 1989-90 fiscal year and each
fiscal year thereafter, allocate the amount of property tax revenue
determined pursuant to subdivision (d) of Section 96.5 or its
predecessor section to jurisdictions in the tax rate area using the
proportionate shares derived pursuant to paragraph (3).
   (5) For purposes of the calculations made pursuant to Section 96.1
or its predecessor section, in the 1990-91 fiscal year and each
fiscal year thereafter, the amounts that would have been allocated to
qualifying cities pursuant to this subdivision shall be deemed to be
the "amount of property tax revenue allocated in the prior fiscal
year."
   (c) "TEA formula" means the Tax Equity Allocation formula, and
shall be calculated by the auditor for each qualifying city as
follows:
   (1) For the 1988-89 fiscal year and each fiscal year thereafter,
the auditor shall determine the total amount of property tax revenue
to be allocated to all jurisdictions in all tax rate areas within the
qualifying city, before the allocation and payment of funds in that
fiscal year to a community redevelopment agency within the qualifying
city, as provided in subdivision (b) of Section 33670 of the Health
and Safety Code.
   (2) The auditor shall determine the total amount of funds
allocated in each fiscal year to a community redevelopment agency in
accordance with subdivision (b) of Section 33670 of the Health and
Safety Code.
   (3) The auditor shall determine the total amount of funds paid in
each fiscal year by a community redevelopment agency within the city
to jurisdictions other than the city pursuant to subdivision (b) of
Section 33401 and Section 33676 of the Health and Safety Code, and
the cost to the redevelopment agency of any land or facilities
transferred and any amounts paid to jurisdictions other than the city
to assist in the construction or reconstruction of facilities
pursuant to an agreement entered into under Section 33401 or 33445.5
of the Health and Safety Code.
   (4) The auditor shall subtract the amount determined in paragraph
(3) from the amount determined in paragraph (2).
   (5) The auditor shall subtract the amount determined in paragraph
(4) from the amount determined in paragraph (1).
   (6) The amount computed in paragraph (5) shall be multiplied by
the following percentages in order to determine the TEA formula
amount to be distributed to the qualifying city in each fiscal year:

   (A) For the first fiscal year in which the qualifying city
receives a distribution pursuant to this section, 1 percent of the
amount determined in paragraph (5).
   (B) For the second fiscal year in which the qualifying city
receives a distribution pursuant to this section, 2 percent of the
amount determined in paragraph (5).
   (C) For the third fiscal year in which the qualifying city
receives a distribution pursuant to this section, 3 percent of the
amount determined in paragraph (5).
   (D) For the fourth fiscal year in which the qualifying city
receives a distribution pursuant to this section, 4 percent of the
amount determined in paragraph (5).
   (E) For the fifth fiscal year in which the qualifying city
receives a distribution pursuant to this section, 5 percent of the
amount determined in paragraph (5).
   (F) For the sixth fiscal year in which the qualifying city
receives a distribution pursuant to this section, 6 percent of the
amount determined in paragraph (5).
   (G) For the seventh fiscal year and each fiscal year thereafter in
which the city receives a distribution pursuant to this section, 7
percent of the amount determined in paragraph (5).
   (d) "Qualifying city" means any city, except a qualifying city as
defined in Section 98.1, that incorporated prior to June 5, 1987, and
had an amount of property tax revenue allocated to it pursuant to
subdivision (a) of Section 96.1 or its predecessor section in the
1988-89 fiscal year that is less than 7 percent of the amount of
property tax revenue computed as follows:
   (1) The auditor shall determine the total amount of property tax
revenue allocated to the city in the 1988-89 fiscal year.
   (2) The auditor shall subtract the amount in the 1988-89 fiscal
year determined in paragraph (3) of subdivision (c) from the amount
determined in paragraph (2) of subdivision (c).
   (3) The auditor shall subtract the amount determined in paragraph
(2) from the amount of property tax revenue determined in paragraph
(1) of subdivision (c).
   (4) The auditor shall divide the amount of property tax revenue
determined in paragraph (1) of this subdivision by the amount of
property tax revenue determined in paragraph (3) of this subdivision.

   (5) If the quotient determined in paragraph (4) of this
subdivision is less than 0.07, the city is a qualifying city.  If the
quotient determined in that paragraph is equal to or greater than
0.07, the city is not a qualifying city.
   (e) The auditor may assess each qualifying city its proportional
share of the actual costs of making the calculations required by this
section, and may deduct that assessment from the amount allocated
pursuant to subdivision (b).  For purposes of this subdivision, a
qualifying city's proportional share of the auditor's actual costs
shall not exceed the proportion it receives of the total amounts
excluded in the county pursuant to subdivision (a).
   (f) Notwithstanding subdivision (b), in any fiscal year in which a
qualifying city is to receive a distribution pursuant to this
section, the auditor shall reduce the actual amount distributed to
the qualifying city by the sum of the following:
   (1) The amount of property tax revenue that was exchanged between
the county and the qualifying city as a result of negotiation
pursuant to Section 99.03.
   (2) (A) (i) In any county other than the County of Santa Clara,
the amount of revenue not collected by the qualifying city in the
first fiscal year following the city's reduction after January 1,
1988, of the tax rate or tax base of any locally imposed tax, except
any tax that was imposed after January 1, 1988.  In the case of a tax
that existed before January 1, 1988, this clause shall apply only
with respect to an amount attributable to a reduction of the rate or
base to a level lower than the rate or base applicable on January 1,
1988.  The amount so computed by the auditor shall constitute a
reduction in the amount of property tax revenue distributed to the
qualifying city pursuant to this section in each succeeding fiscal
year.  That amount shall be aggregated with any additional amount
computed pursuant to this clause as the result of the city's
reduction in any subsequent year of the tax rate or tax base of the
same or any other locally imposed general or special tax.
   (ii) No reduction may be made pursuant to clause (i) in the case
in which a local tax is reduced or eliminated as a result of either a
court decision or the approval or rejection of a ballot measure by
the voters.
   (B) In the County of Santa Clara, the net of the amounts
determined and applied as follows:
   (i) An amount determined and applied as described in clause (i) of
subparagraph (A), but not subject to the prohibition of clause (ii)
of subparagraph (A).
   (ii) The additional amount of revenue that is collected by the
qualifying city in the first fiscal year following the operative date
of the city's increase in the rate or base of, or new imposition of,
a locally imposed tax, on or after January 1, 1998.  The amount so
computed by the auditor shall constitute an increase in the amount of
property tax revenue distributed to the qualifying city pursuant to
this section in each succeeding fiscal year, until the first fiscal
year following the repeal of the increase or tax.  That amount shall
be aggregated with any additional amount computed pursuant to this
clause as the result of the city's increase in the rate or base of,
or new imposition of, a locally imposed tax in any subsequent year.
Notwithstanding any other provision of this clause, in no fiscal year
shall the total amount computed for the qualifying city pursuant to
this clause exceed the total amount computed for the qualifying city
pursuant to clause (i).
   (3) The amount of property tax revenue received pursuant to this
chapter in excess of the amount allocated for the 1986-87 fiscal year
by all special districts that are governed by the city council of
the qualifying city or whose governing body is the same as the city
council of the qualifying city with respect to all tax rate areas
within the boundaries of the qualifying city.
   Notwithstanding this paragraph:
   (A) Commencing with the 1994-95 fiscal year, the auditor shall not
reduce the amount distributed to a qualifying city under this
section by reason of that city becoming the successor agency to a
special district that is dissolved, merged with that city, or becomes
a subsidiary district of that city, on or after July 1, 1994.
   (B) Commencing with the 1997-98 fiscal year, the auditor shall not
reduce the amount distributed to a qualifying city under this
section by reason of that city withdrawing from a county free library
system pursuant to Section 19116 of the Education Code.
   (4) Any amount of property tax revenues that has been exchanged
pursuant to Section 56842 of the Government Code between the City of
Rancho Mirage and a community services district, the formation of
which was initiated on or after March 6, 1997, pursuant to Chapter 4
(commencing with Section 56800) of Part 3 of Division 3 of Title 5 of
the Government Code.
   (g) In any fiscal year in which a qualifying city is to receive a
distribution pursuant to this section, the auditor shall increase the
actual amount distributed to the qualifying city by the amount of
property tax revenue allocated to the qualifying city pursuant to
Section 19116 of the Education Code.
   (h) If the auditor determines that the amount to be distributed to
a qualifying city pursuant to subdivision (b), as modified by
subdivisions (e), (f), and (g) would result in a qualifying city
having proceeds of taxes in excess of its appropriation limit, the
auditor shall reduce the amount, on a dollar-for-dollar basis, by the
amount that exceeds the city's appropriations limit.
   (i) The amount not distributed to the tax rate areas of a
qualifying city as a result of this section shall be distributed by
the auditor to the county.
   (j) Notwithstanding any other provision of this section, no
qualifying city shall be distributed an amount pursuant to this
section that is less than the amount the city would have been
allocated without the application of the TEA formula.
   (k) Notwithstanding any other provision of this section, the
auditor shall not distribute any amount determined pursuant to this
section to any qualifying city that has in the prior fiscal year used
any revenues or issued bonds for the construction, acquisition, or
development, of any facility which is defined in Section 103(b)(4),
103(b)(5), or 103(b)(6) of the Internal Revenue Code of 1954 prior to
the enactment of the Tax Reform Act of 1986 (P.L. 99-514) and is no
longer eligible for tax-exempt financing.
  SEC. 1.5.  Section 98 of the Revenue and Taxation Code is amended
to read:
   98.  (a) In each county, other than the County of Ventura, having
within its boundaries a qualifying city, the computations made
pursuant to Section 96.1 or its predecessor section, for the 1989-90
fiscal year and each fiscal year thereafter, shall be modified as
follows:
   With respect to tax rate areas within the boundaries of a
qualifying city, there shall be excluded from the aggregate amount of
"property tax revenue allocated pursuant to this chapter to local
agencies, other than for a qualifying city, in the prior fiscal year,"
an amount equal to the sum of the amounts calculated pursuant to the
TEA formula.
   (b) (1) Except as otherwise provided in this section, each
qualifying city shall, for the 1989-90 fiscal year and each fiscal
year thereafter, be allocated by the auditor an amount determined
pursuant to the TEA formula.
   (2) For each qualifying city, the auditor shall, for the 1989-90
fiscal year and each fiscal year thereafter, allocate the amount
determined pursuant to the TEA formula to all tax rate areas within
that city in proportion to each tax rate area's share of the total
assessed value in the city for the applicable fiscal year, and the
amount so determined shall be subtracted from the county's
proportionate share of property tax revenue for that fiscal year
within those tax rate areas.
   (3) After making the allocations pursuant to paragraphs (1) and
(2), but before making the calculations pursuant to Section 96.5 or
its predecessor section, the auditor shall, for all tax rate areas in
the qualifying city, calculate the proportionate share of property
tax revenue allocated pursuant to this section and Section 96.1, or
their predecessor sections, in the 1989-90 fiscal year and each
fiscal year thereafter to each jurisdiction in the tax rate area.
   (4) In lieu of making the allocations of annual tax increment
pursuant to subdivision (e) of Section 96.5 or its predecessor
section, the auditor shall, for the 1989-90 fiscal year and each
fiscal year thereafter, allocate the amount of property tax revenue
determined pursuant to subdivision (d) of Section 96.5 or its
predecessor section to jurisdictions in the tax rate area using the
proportionate shares derived pursuant to paragraph (3).
   (5) For purposes of the calculations made pursuant to Section 96.1
or its predecessor section, in the 1990-91 fiscal year and each
fiscal year thereafter, the amounts that would have been allocated to
qualifying cities pursuant to this subdivision shall be deemed to be
the "amount of property tax revenue allocated in the prior fiscal
year."
   (c) "TEA formula" means the Tax Equity Allocation formula, and
shall be calculated by the auditor for each qualifying city as
follows:
   (1) For the 1988-89 fiscal year and each fiscal year thereafter,
the auditor shall determine the total amount of property tax revenue
to be allocated to all jurisdictions in all tax rate areas within the
qualifying city, before the allocation and payment of funds in that
fiscal year to a community redevelopment agency within the qualifying
city, as provided in subdivision (b) of Section 33670 of the Health
and Safety Code.
   (2) The auditor shall determine the total amount of funds
allocated in each fiscal year to a community redevelopment agency in
accordance with subdivision (b) of Section 33670 of the Health and
Safety Code.
   (3) The auditor shall determine the total amount of funds paid in
each fiscal year by a community redevelopment agency within the city
to jurisdictions other than the city pursuant to subdivision (b) of
Section 33401 and Section 33676 of the Health and Safety Code, and
the cost to the redevelopment agency of any land or facilities
transferred and any amounts paid to jurisdictions other than the city
to assist in the construction or reconstruction of facilities
pursuant to an agreement entered into under Section 33401 or 33445.5
of the Health and Safety Code.
   (4) The auditor shall subtract the amount determined in paragraph
(3) from the amount determined in paragraph (2).
   (5) The auditor shall subtract the amount determined in paragraph
(4) from the amount determined in paragraph (1).
   (6) The amount computed in paragraph (5) shall be multiplied by
the following percentages in order to determine the TEA formula
amount to be distributed to the qualifying city in each fiscal year:

   (A) For the first fiscal year in which the qualifying city
receives a distribution pursuant to this section, 1 percent of the
amount determined in paragraph (5).
   (B) For the second fiscal year in which the qualifying city
receives a distribution pursuant to this section, 2 percent of the
amount determined in paragraph (5).
   (C) For the third fiscal year in which the qualifying city
receives a distribution pursuant to this section, 3 percent of the
amount determined in paragraph (5).
   (D) For the fourth fiscal year in which the qualifying city
receives a distribution pursuant to this section, 4 percent of the
amount determined in paragraph (5).
   (E) For the fifth fiscal year in which the qualifying city
receives a distribution pursuant to this section, 5 percent of the
amount determined in paragraph (5).
   (F) For the sixth fiscal year in which the qualifying city
receives a distribution pursuant to this section, 6 percent of the
amount determined in paragraph (5).
   (G) For the seventh fiscal year and each fiscal year thereafter in
which the city receives a distribution pursuant to this section, 7
percent of the amount determined in paragraph (5).
   (d) "Qualifying city" means any city, except a qualifying city as
defined in Section 98.1, that incorporated prior to June 5, 1987, and
had an amount of property tax revenue allocated to it pursuant to
subdivision (a) of Section 96.1 or its predecessor section in the
1988-89 fiscal year that is less than 7 percent of the amount of
property tax revenue computed as follows:
   (1) The auditor shall determine the total amount of property tax
revenue allocated to the city in the 1988-89 fiscal year.
   (2) The auditor shall subtract the amount in the 1988-89 fiscal
year determined in paragraph (3) of subdivision (c) from the amount
determined in paragraph (2) of subdivision (c).
   (3) The auditor shall subtract the amount determined in paragraph
(2) from the amount of property tax revenue determined in paragraph
(1) of subdivision (c).
   (4) The auditor shall divide the amount of property tax revenue
determined in paragraph (1) of this subdivision by the amount of
property tax revenue determined in paragraph (3) of this subdivision.

   (5) If the quotient determined in paragraph (4) of this
subdivision is less than 0.07, the city is a qualifying city.  If the
quotient determined in that paragraph is equal to or greater than
0.07, the city is not a qualifying city.
   (e) The auditor may assess each qualifying city its proportional
share of the actual costs of making the calculations required by this
section, and may deduct that assessment from the amount allocated
pursuant to subdivision (b).  For purposes of this subdivision, a
qualifying city's proportional share of the auditor's actual costs
shall not exceed the proportion it receives of the total amounts
excluded in the county pursuant to subdivision (a).
   (f) Notwithstanding subdivision (b), in any fiscal year in which a
qualifying city is to receive a distribution pursuant to this
section, the auditor shall reduce the actual amount distributed to
the qualifying city by the sum of the following:
   (1) The amount of property tax revenue that was exchanged between
the county and the qualifying city as a result of negotiation
pursuant to Section 99.03.
   (2) (A) (i) In any county other than the County of Santa Clara,
the amount of revenue not collected by the qualifying city in the
first fiscal year following the city's reduction after January 1,
1988, of the tax rate or tax base of any locally imposed tax, except
any tax that was imposed after January 1, 1988.  In the case of a tax
that existed before January 1, 1988, this clause shall apply only
with respect to an amount attributable to a reduction of the rate or
base to a level lower than the rate or base applicable on January 1,
1988.  The amount so computed by the auditor shall constitute a
reduction in the amount of property tax revenue distributed to the
qualifying city pursuant to this section in each succeeding fiscal
year.  That amount shall be aggregated with any additional amount
computed pursuant to this clause as the result of the city's
reduction in any subsequent year of the tax rate or tax base of the
same or any other locally imposed general or special tax.
   (ii) No reduction may be made pursuant to clause (i) in the case
in which a local tax is reduced or eliminated as a result of either a
court decision or the approval or rejection of a ballot measure by
the voters.
   (B) In the County of Santa Clara, the net of the amounts
determined and applied as follows:
   (i) An amount determined and applied as described in clause (i) of
subparagraph (A), but not subject to the prohibition of clause (ii)
of subparagraph (A).
   (ii) The additional amount of revenue that is collected by the
qualifying city in the first fiscal year following the operative date
of the city's increase in the rate or base of, or new imposition of,
a locally imposed tax, on or after January 1, 1998.  The amount so
computed by the auditor shall constitute an increase in the amount of
property tax revenue distributed to the qualifying city pursuant to
this section in each succeeding fiscal year, until the first fiscal
year following the repeal of the increase or tax.  That amount shall
be aggregated with any additional amount computed pursuant to this
clause as the result of the city's increase in the rate or base of,
or new imposition of, a locally imposed tax in any subsequent year.
Notwithstanding any other provision of this clause, in no fiscal year
shall the total amount computed for the qualifying city pursuant to
this clause exceed the total amount computed for the qualifying city
pursuant to clause (i).
   (3)  The amount of property tax revenue received pursuant to this
chapter in excess of the amount allocated for the 1986-87 fiscal year
by all special districts that are governed by the city council of
the qualifying city or whose governing body is the same as the city
council of the qualifying city with respect to all tax rate areas
within the boundaries of the qualifying city.
   Notwithstanding this paragraph:
   (A) Commencing with the 1994-95 fiscal year, the auditor shall not
reduce the amount distributed to a qualifying city under this
section by reason of that city becoming the successor agency to a
special district, that is dissolved, merged with that city, or
becomes a subsidiary district of that city, on or after July 1, 1994.

   (B) Commencing with the 1997-98 fiscal year, the auditor shall not
reduce the amount distributed to a qualifying city under this
section by reason of that city withdrawing from a county free library
system pursuant to Section 19116 of the Education Code.
   (4) Any amount of property tax revenues that has been exchanged
pursuant to Section 56842 of the Government Code between the City of
Rancho Mirage and a community services district, the formation of
which was initiated on or after March 6, 1997, pursuant to Chapter 4
(commencing with Section 56800) of Part 3 of Division 3 of Title 5 of
the Government Code.
   (g) Notwithstanding any other provision of this section, in no
event may the auditor reduce the amount of ad valorem property tax
revenue otherwise allocated to a qualifying city pursuant to this
section on the basis of any additional ad valorem property tax
revenues received by that city pursuant to a services for revenue
agreement.  For purposes of this subdivision, a "services for revenue
agreement" means any agreement between a qualifying city and the
county in which it is located, entered into by joint resolution of
that city and that county, under which additional service
responsibilities are exchanged in consideration for additional
property tax revenues.
   (h) In any fiscal year in which a qualifying city is to receive a
distribution pursuant to this section, the auditor shall increase the
actual amount distributed to the qualifying city by the amount of
property tax revenue allocated to the qualifying city pursuant to
Section 19116 of the Education Code.
   (i) If the auditor determines that the amount to be distributed to
a qualifying city pursuant to subdivision (b), as modified by
subdivisions (e), (f), and (g) would result in a qualifying city
having proceeds of taxes in excess of its appropriation limit, the
auditor shall reduce the amount, on a dollar-for-dollar basis, by the
amount that exceeds the city's appropriations limit.
   (j) The amount not distributed to the tax rate areas of a
qualifying city as a result of this section shall be distributed by
the auditor to the county.
   (k) Notwithstanding any other provision of this section, no
qualifying city shall be distributed an amount pursuant to this
section that is less than the amount the city would have been
allocated without the application of the TEA formula.
   (l) Notwithstanding any other provision of this section, the
auditor shall not distribute any amount determined pursuant to this
section to any qualifying city that has in the prior fiscal year used
any revenues or issued
bonds for the construction, acquisition, or development, of any
facility which is defined in Section 103(b)(4), 103(b)(5), or 103(b)
(6) of the Internal Revenue Code of 1954 prior to the enactment of
the Tax Reform Act of 1986 (P.L. 99-514) and is no longer eligible
for tax-exempt financing.
  SEC. 2.  The Legislature finds and declares that a special law is
necessary and that a general law cannot be made applicable within the
meaning of Section 16 of Article IV of the California Constitution
because of both of the following:
   (a) The unique sequence of city tax repeals and impositions, not
accounted for by generally applicable provisions regarding reductions
in TEA formula allocations, undertaken in recent years by qualified
cities in the County of Santa Clara.
   (b) The failure of generally applicable provisions to account for
the unique sequence of changes in recent years to local tax rates in
the County of Santa Clara would, if left unaddressed, result in
unintended, disparate reductions in the amount of TEA formula
allocations to qualified cities in that county.
  SEC. 3.  Section 1.5 of this bill incorporates amendments to
Section 98 of the Revenue and Taxation Code proposed by both this
bill and SB 1581.  It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2001, (2)
each bill amends Section 98 of the Revenue and Taxation Code, and (3)
this bill is enacted after SB 1581, in which case Section 1 of this
bill shall not become operative.
  SEC. 4.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because a
local agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the program or
level of service mandated by this act, within the meaning of Section
17556 of the Government Code.
